The Human Element

The Human Element

Sometimes I complain (mostly to myself, and sometimes to other people who don’t care) that the IRS customer service employees are like robots. They tend to go by the book even when there presents itself a more common sense and just solution. There is very little emotion or sensitivity for the struggling taxpayer who is burdened by a bank levy or wage garnishment. However, sometimes I am reminded that the flip side can be just as bad: the human response can at times be ugly too. The employees who make up the IRS are actually human beings with all the same passions and foibles as regular folks, and there’s no better reminder than when we hear of IRS agents accepting bribes.

After IRS Agent, Paul Hurley, allegedly saved a medical marijuana dispensary owner a million dollars in an audit, he suggested that, in exchange for the good deed, the owner give him $20,000. As if he thought he was being wire tapped, or as if it is somehow less obviously bribery when no words are used, the IRS agent rubbed his thumb over the top of his index and middle finger in the universal sign for “cash money.” He should have gone with his gut on this one because later, when payment day arrived, the FBI would be watching the whole thing. These kinds of deals almost always end badly for the IRS employee because as much as the IRS doesn’t trust taxpayers with delinquent tax accounts (especially when tied to a medical pot store), taxpayers trust IRS agents even less. As you can imagine, our guy in this story didn’t take long to decide before he was on the phone with the authorities tipping them off. Hurley’s trial begins this week.

The puzzling thing about this story is that Hurley demonstrates a significant amount of remorse in his resignation letter but his attorneys state that he denies soliciting a bribe. In fact, his attorneys say that Hurley was actually being offered a job to assist with the company’s books and the $20k was just up-front payment for this little side job! Even though I am one, I find it incredible what attorneys will say sometimes.

House Republicans Seek Impeachment of IRS Commish

Two days ago the Justice Department formally closed its investigation of alleged targeting of conservative groups by the Internal Revenue Service. DOJ found that Lois Lerner and other top IRS managers were guilty of “mismanagement, poor judgment, and institutional inertia,” but had done nothing criminal. This scandal began in 2013 and has been a hot topic in tax professional circles and among anyone interested in government & politics. Over the course of these past two and a half years, the IRS has been investigated by TIGTA, the Justice Department, and even the FBI. Some IRS officials involved in the scandal have resigned under the pressure. Even so, the DOJ stated that there was no evidence that any IRS official obstructed justice or attempted to obstruct justice. Big win for the IRS.

But GOP lawmakers don’t want to put this scandal to rest until justice has been served. Their target is IRS Commissioner, John Koskinen, and they’re not interested in settling with contempt or obstruction charges; they want to impeach him. Rep. Jason Chaffetz (R-Utah) and 18 other republicans have initiated the seldom-used impeachment process against Commissioner John Koskinen, which will go through the House Judiciary Committee next. Those who support impeachment of Koskinen claim that he has violated the public trust by lying about the existence of emails, or deleting emails, or allowing emails to be deleted on his watch, or any combination of these things. The IRS, of course, insists that it has fully cooperated with any and all investigations, spending upwards of $20 million and 160,000 employee hours in the process.

Interesting footnote: pursuing impeachment against an agency official is rare. Back in 1876 Congress tried to impeach War Secretary, William Belknap, but he resigned before conclusion of the process. Belknap, known as a man of virtues and flaws, was secretary to President Grant, and an attorney by trade. He went back to that trade after it was discovered that he had been involved in bribes and in selling weapons to France.

Commissioner Koskinen Asked to Resign

IRS Commissioner, John Koskinen, has been on the job for only a couple years, but he was brought in at a very difficult time for the agency. He was appointed by Pres. Obama and given the task of cleaning things up at the IRS, particularly in regard to the scandal involving targeting of Tea Party groups. Now he has lawmakers calling for his resignation because of the way he has handled the debacle. I bet there are days he regrets accepting the assignment.

The most outspoken republicans insist that Koskinen lied about the missing emails. Jason Chaffetz (R-Utah) is on record saying that Koskinen was in possession of the emails, and then after they were subpoenaed, his agency destroyed them. Many now want him to resign, and if he doesn’t, they are threatening worse. They are throwing around words like “contempt,” “obstruction of justice,” and “impeachment.”

President Obama claims that there was “not even a smidgen of corruption” within the IRS, but everybody knows this isn’t true. He needs to be a little more careful with his words. The IRS is huge and people are imperfect, arrogant, and greedy. How can he say there isn’t a smidgen of corruption? He doesn’t know that. All that really means is he has had meetings with those that run the agency who say there’s no corruption, who have had meetings with high level management who say there’s no corruption, who have had meetings with lower level management, etc. There is no way any clear-thinking adult could swallow such a broad statement as that.

According to Chaffetz, there are still at least 5 open investigations into the targeting scandal, including that of TIGTA and the Department of Justice. I, for one, must admit that I am a little surprised that the news of this scandal hasn’t fizzled yet. I think it speaks to how passionate we are, as US citizens, about allegations of corruption within our government.

IRS Doctors & Nurses

Have you seen the comments from former IRS territory manager, Michael Gregory, in a recent “Ask Me Anything” session on Reddit?  Many readers have felt dissatisfied with his answers because he seemed to be overly concerned with defending the IRS, defending Lois Lerner, and griping about underfunding.  I talk with the IRS every day and I must say that this guy is definitely “one of them.”  As a 28-year veteran, admittedly it would be difficult to remove oneself from that role and the IRS lingo, even after retirement.  But this guy went a little too far.  As one Reddit user pointed out, he almost sounded like an IRS lobbyist.  I totally agree, but let’s move on to something more substantive in his comments.

At one point Gregory compared IRS specialists to medical specialists:

The IRS has 13,200 revenue agents and about 2,000 specialists. I managed 1/4 of the country’s specialists in engineering and valuation issues, with specialization comes an added degree of due diligence and accuracy. It’s like if you go to a doctor you get referred to a specialist – the same thing is true at the IRS.

I do not disagree with this comparison.  But the problem should be obvious: there aren’t near enough specialists to go around.  Think of the ratio of 2,000 specialists to how many million taxpayers?!  Same with revenue agents (the tax doctors); 13,200 isn’t nearly enough.  So what happens is a vast majority of taxpayer accounts are handled by (to complete the analogy) the nurses of the IRS — the customer service reps.  There are too many inexperienced, undertrained, underqualified employees.  It can be very frustrating for taxpayers who reach out for help, and they just want to be able to resolve their tax issues and move on.  In many cases, if they could just get in touch with a doctor, the issue could be resolved the same day.  But in reality they often get bounced around from nurse to nurse and nothing gets accomplished.

The IRS (IRS insiders) would have you believe that Congress can throw money at this problem and make it go away, but money alone will not change it if all they do is increase the number of nurses.

IRS: The Raiders of Government Agencies

Usually when people are dressed in black surrounding a hole in a solemn ceremony, its a funeral.  But Tony Sparano, the interim head coach of the 0-4 Oakland Raiders, gathered the team for a special symbolic football burial this week.  He said that the football represented the first four games of the season.  The hope is that this little exercise will help the team to put it all behind them and move forward with a clean slate.

Maybe the IRS Commissioner, John Koskinen, should do something like this with his team.  I’m not sure what item(s) could be used to represent the past few years of missteps at the IRS, but to really drive the point home he would need to dig a hole the size of the Grand Canyon.  Actually, come to think of it, maybe they already did this exercise using Lois Lerner’s hard drive.  Nobody would ever consider that the IRS actually physically buried her emails in the ground.

Oakland Raiders vs. Internal Revenue Service.  Obviously the comparisons are unlimited given the fact that a Raider is actually a pirate, and a pirate is known for forcefully taking one’s hard-earned booty.  But I’ll leave this to your own imagination.

OPR: The Standard-Bearer for Integrity?

We know the IRS has a habit of making outrageously stupid decisions from time to time.  But moral decay over the past few decades is swiftly converting into a full-blown moral nosedive.   The debacle this week in the Office of Professional Responsibility (OPR) is ridiculous enough to cause poor Johnnie Walters to turn over in his grave.

You have to understand the role of OPR in order to appreciate the irony of what has happened.  OPR is a department within the IRS responsible for regulation of tax practitioners.  They enforce the rules of practice before the IRS, investigate misconduct, and discipline those who have violated the rules.  The top executive at OPR is Director, Karen L. Hawkins.  She sent Takisha McGee, knowing that McGee’s law license was suspended and that she was in the middle of disbarment proceedings, to give a speech to Florida tax attorneys.  The topic of her speech?  Oh, just “When your license to practice before the IRS is on the line” that’s all.

Even the best fiction writers couldn’t make this stuff up.  I haven’t seen so much irony since 9th grade English Lit class.  McGee is also part of OPR Management and is listed 5 spaces below Hawkins on the very first page of OPR’s website in case you care to look her up.  And while you’re there, you might notice OPR’s vision:

To be the standard-bearer for integrity in tax practice.

And OPR’s mission statement:

Interpret and apply the standards of practice for tax professionals in a fair and equitable manner.

Oh, and Hawkins is also on the record for similar hypocrisy of her own:

I expect nothing but absolute integrity out of both myself and my staff because I just don’t see how you can justify disciplining others for lack of integrity if you aren’t demonstrating integrity-plus on your own behalf.

What a joke.  There’s not much integrity left in government, particularly the IRS.  No, McGee hasn’t officially been disbarred, and yes she is appealing the disbarment recommendation.  But even if we assume she wins in the end, she is still suspended right now!  Any attorney will tell you how unethical it is to practice law with a suspended license; if you got caught, you would certainly be disbarred.  And maybe OPR can make an argument that lecturing other attorneys does not constitute the practice of law, but they had to consider how this might look and how it might be completely contrary to their office’s “vision.”  They had to consider the fact that state bar disciplinary decisions are public information.  Anybody can look up Ms. McGee on the D.C. Bar website (as long as they can figure out that her maiden name is Brown) and see that her membership status is indeed “suspended.”  Were they never concerned that one of those Florida attorneys would think to do that?

To top it all off, McGee seems to think that her own ethical challenges give her some kind of advantage when it comes to empathizing with tax professionals who are being investigated by her office.  That’s assuming she’ll be keeping her job, which is doubtful.  Whatever personal lesson she has learned, I don’t think it is appropriate to learn at the expense of every taxpayer in the country who relies on the IRS and all its departments to administer taxes in a fair an honest manner.

Lerner Emails not so Benign

There are just as many “crazies” in Sacramento as there are in Modesto, you just have to know where to find them.  And there are just as many Democrat crazies as there are Republicans.  After all, craziness knows no race, religion, or political preference.   Same with “—holes.”  In fact, that group may be more common than crazies.

Of course what I’m referring to here is the content of a couple emails that the now-famous Lois Lerner sent to a friend from her government issue Blackberry in 2012.  Her friend brought up the topic of right-wing radio shows and Lerner referred to the hosts and listeners of such shows as “crazies” and “—holes.”  The emails were released on Wednesday and Republican lawmakers see them as proof of Lerner’s disdain for conservatives and proof that she was targeting conservative groups’ tax-exempt status applications for extra scrutiny.

This new evidence clearly demonstrates why Ms. Lerner not only targeted conservatives, but denied such groups their rights to due process and equal protection under the law.

~ Rep. Dave Camp, chairman of the House Ways and Means Committee

Just to play the devil’s advocate, because that’s what I like to do, there are a number of ways to rebut the accusation that Lerner is biased against conservatives.  For example, maybe she loves conservatives but dislikes the “whacko wing” of the GOP, as her friend put it.  Maybe she specifically dislikes the small faction of radio whackos in the whacko wing of the GOP.  Maybe it’s only the radio wackos in the whacko wing who actually call in and talk apocalyptically about our beloved ‘Merca and the need to protect her borders, hunker down, buy ammo and food, and prepare for the end.  Maybe that’s who she thinks are the crazy assholes that don’t deserve tax-exempt status.  But even so, I think these emails suggest that she was most likely not being fair and impartial in the discharge of her official duties.

Lost Lerner Emails May Still Turn Up

Over the past several weeks, top IRS officials have maintained the position that the Lois Lerner emails were destroyed and cannot be recovered.  But recent testimony to Congress suggests otherwise.  Just as everyone on earth suspected, the emails may still exist in some sort of backup storage device or system.  After all, even the IRS knows that technology fails and you have to back things up.

I don’t know if there is a backup tape with information on it or there isn’t…There is an issue as to whether or not there is a — that all of the backup recovery tapes were destroyed on the six-month retention schedule.

~ Thomas Kane, IRS Deputy Associate Chief Counsel

One of these “top IRS officials” is John Kos-freakin-kinen; he is the COMMISSIONER of the IRS, the highest guy on the totem pole, the captain of the ship.  Oh, and he happens to also be an ATTORNEY.  Lawyers know (every single one of them, especially cum laude Yale-educated lawyers like Koskinen) that when you’re being questioned and you don’t know the answer to the question, then your answer has to be “I don’t know.”  We lecture our clients about this before every deposition and hearing: “Don’t make up answers, and don’t guess.  If you don’t know the answer, it’s fine, just say you don’t know.” It often takes courage, and sometimes a little humility, to admit you don’t know something, especially if you’re in a position where you really should know.

Well, apparently Koskinen said the emails didn’t exist before he had confirmation of such and now his credibility is being questioned.

And isn’t this what it’s all about — the credibility of the IRS and its people?  Every single IRS scandal buries the IRS deeper in a pile of suspicion and mistrust.  How does the IRS expect taxpayers to voluntarily comply with tax laws if the agency is being run by so many incompetent leaders?  Now I know that somebody in a position like Koskinen’s often relies on the expertise and knowledge of a staff and couldn’t possibly have first-hand knowledge of everything going on within the agency.  But it seems to me that he should have at least waited for confirmation before declaring the emails unrecoverable.

IRS Worker Suspended for Violation of Hatch Act

You know the statistic about what percentage of your life is spent sleeping?  Does it shock you just a little bit and make you want to sleep less?  That’s the way I feel when I think about what percentage of my life is spent talking (or waiting on hold) with the IRS.  I could probably figure it out, but I would rather remain ignorant of those details.  Well, even after having logged hundreds or thousands of hours with them, I can honestly say that I have never been asked to support any particular political candidate.

Recently an IRS call center employee was suspended for 100 days after the US Office of Special Counsel (OSC) determined that he/she had violated the Hatch Act by engaging in partisan political activity while on the clock.  This particular worker encouraged callers to vote for Obama on taxpayers’ dime.  This “encouragement” came in the form of some kind of chant based on the spelling of the employee’s last name.  I would love to know what this sounded like, but exact details were not given.  In fact, IF ANYBODY CAN PRODUCE AUDIO OF THE IRS EMPLOYEE WHO PROMOTED OBAMA’S CANDIDACY BY RECITING A CUTE LITTLE CHANT AT THE END OF EACH CALL, PLEASE CONTACT ME IMMEDIATELY.

There have been plenty of times when I thought that the IRS representative was getting a bit too chummy with me.  I really don’t mind that; I like to see that they are enjoying their job.  But I wouldn’t want to see them get in trouble.  The worst I’ve heard is when they start bashing the IRS and complaining about their job, their equipment, other IRS departments, their flawed internal processes.  That actually happens fairly regularly.  As far as I know there is nothing illegal about this kind of behavior, but I don’t imagine a supervisor would appreciate hearing it.

The real controversy in this story is that the OSC investigation actually resulted in the termination of a postal worker who violated the Hatch Act, whereas the IRS worker was only suspended.  There are significant differences in the facts of each case.  You be the judge and read about those differences here.

IRS Claims Lerner's Emails are Unrecoverable

The IRS scandal involving the disparate treatment by the IRS of certain tax exempt organizations (or their applications for tax exempt status) still has life.  The government committees responsible for investigating the IRS “targeting scandal,” as it has come to be known, wanted to see Lois Lerner’s emails, and last week the IRS responded that they are unable to recover her emails, apparently due to the fact that her computer crashed in 2011 and the IRS did not make a practice of preserving all emails on their servers.

Experts find it hard to believe that the IRS lost the files innocently and that they cannot be recovered.  From a legal standpoint, it is common knowledge that you don’t delete emails anytime there is a potential for litigation; in fact, you do whatever you can to preserve them.  From a tech standpoint, it is difficult to believe that the emails could have simply disappeared, even if the IRS was not conscientiously backing up data at the time.  The idea that files are never really 100% gone when you delete them has some truth to it.

From a layperson point of view, it appears that we’re witnessing some sort of cover-up.  It just doesn’t pass the “smell test.”  I feel like my 10-year-old would be able to sit down at Lerner’s computer and at least find something.  But if not, in this day and age, computer geeks are a dime a dozen.  Why can’t we just hire the world’s smartest forensic geek at the FBI or CIA and be done with this?

However, as much as the experts and the general public do not believe the emails were lost inadvertently, I have to admit that the facts as we know them do not sound too far fetched to me.  From the viewpoint of a tax attorney who deals with the IRS every day, it seems plausible that the IRS really would not save or properly back-up the emails.  There’s no way the IRS could possibly save everything.  And as for Lerner’s computer crashing, well that kind of thing happens constantly at IRS service centers all around the country.  Sometimes when I’m talking with an IRS representative on the phone, I try to imagine the computer their working on and, in my mind, it usually has a 3.5″ floppy disc drive and a behemoth monitor that is twice as deep as it is wide.